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ans-odd-problems-ch14

# ans-odd-problems-ch14 - CHAPTER 14 LONG-TERM FINANCING AN...

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CHAPTER 14 LONG-TERM FINANCING: AN INTRODUCTION Solutions to Odd-Numbered Questions and Problems NOTE: All end of chapter problems were solved using a spreadsheet. Many problems require multiple steps. Due to space and readability constraints, when these intermediate steps are included in this solutions manual, rounding may appear to have occurred. However, the final answer for each problem is found without rounding during any step in the problem. Basic 1. a. Since the common stock entry in the balance sheet represents the total par value of the stock, simply divide that by the par per share: Shares outstanding = \$165,320 / \$0.50 Shares outstanding = 330,640 b. Capital surplus is the amount received over par, so capital surplus plus par gives you the total dollars received. In aggregate, the solution is: Net capital from the sale of shares = Common Stock + Capital Surplus Net capital from the sale of shares = \$165,320 + 2,876,145 Net capital from the sale of shares = \$3,041,025 Therefore, the average price is: Average price = \$3,041,465 / 330,640 Average price = \$9.20 per share

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